The European Court of Justice (ECJ) has recently passed a decision in a Case C‑454/10 Oliver Jestel regarding the question of who is liable for the payment of customs duties when goods are imported into the EU. The case involved an Online shop within the EU, where the shop owner was acting as an intermediary between the fraudulent seller and the customers. ECJ has essentially deemed that the shop owner is co-liable for the payment of the costumes duties and import VAT, which should have been paid (but were not) be the foreign seller, as the shop owner should have been aware that the seller is selling goods illegally imported into the EU.
The German Federal Finance Court referred a question to the ECJ asking for a preliminary ruling on the following question: Does a person become a debtor liable to pay customs duties because of participation in the unlawful introduction of goods into the customs territory of the EU where that person arranges the conclusion of the contracts to purchase the goods concerned and therefore envisages that the seller will possibly deliver the goods avoiding import duties?
In the case at hand, the defendant had auctioned goods originating in China on eBay. He acted as intermediary for the sale of the goods and collected the sales price. The setting of prices and procuring of the goods was the responsibility of the Chinese supplier. The supplier delivered the goods directly to the purchasers based in Germany by post.
The goods were shipped to the customers without the goods first being presented to customs and without import duties being levied, as the Chinese supplier falsely reported value and content of delivered packages.
The ECJ decided that a person who participates in the introduction of goods to the EU as intermediary in the sale of these goods must be considered as debtor of a customs debt through unlawful introduction of the goods into the customs territory of the EU, if that person was aware, or should reasonable have been aware, that the introduction was unlawful.
What does this mean for you?
If your company is acting as an intermediary for goods sold from outside the EU to customers in the EU, you have to take into consideration also customs issues, even though you are not importing the goods yourself.
Based on the above decision, if your supplier delivers the goods incorrectly to the EU and you are aware of such acts, you may still become debtor of import duties based on your awareness of such issues.
Additionally, according to EU legislation, the intermediary is expected to ensure that the goods concerned will not be unlawfully introduced to the EU and to inform the supplier of its obligation to declare the goods to customs, if required.